Debating Ontario’s Minimum Wage Increase: Part II

June 27, 2017

By Isabel Zucchero, Centre Coordinator

As we continue the conversation around minimum wage in Ontario, finding solutions that go deeper than surface level is challenging. A recent discussion about equal opportunity brought forward a helpful analogy that helps put Ontario’s minimum wage debate in perspective for those “on the fence” about the issue.

We often think of poverty reduction in terms of giving people the tools they need to see progress – teaching people to fish rather than simply giving them a fish as a kind gesture. Taking this frequently used analogy one step further, a colleague at the LPRC made a critical distinction: “we can teach people how to fish all we like, but this doesn’t help the people who don’t have access to the lake where the fish are”. From this perspective, the minimum wage debate becomes one about access to basic necessities, and equal opportunity to gain that access.

A long-standing assumption that plagues the way we talk about poverty reduction has reared its ugly head during the course of the minimum wage debate in Ontario, making the problem even more complex than it seems at first glance. That assumption is this: we think that poverty is selective. We assume that people living on a low income have somehow chosen a path in life that causes them to earn less than their annual living expenses, and these choices have made poverty “choose” the people it touches. We even go one step further and simplify solutions by associating low income with poor budgeting or lack of money management, suggesting that “if poor people just budgeted better, they wouldn’t be poor”. Negative stigmas associated with poverty suggest that these people are lazy, or not willing to work, or have somehow done something wrong to be working 50 hours a week to support their kids and still not have enough to put food on the table.

In reality, the people we assign these negative stereotypes are the same people kept in that low-income situation by their employment situations. Working jobs that do not pay enough to support a single person in our current economy, let alone a family, regardless of how many part time jobs they acquire, is the issue beneath the surface. What people who oppose minimum wage increase fail to realize is that, for the vast majority of people living in low income, their situation is not one that can simply be “budgeted” out of when that budget is already being stretched to keep food in the fridge and the lights on in the house. In reality, these people are often better money managers than the average citizen living above the poverty line. Associating poverty with laziness or lack of self-management ignores the resilience and resourcefulness of those who actively plan their budgets to make ends meet each month.

A common theme that comes up in reasoning against minimum wage increase is that simply paying people more money to do the same work that they have always done for less is a “handout”. Furthermore, it is argued that rewarding low income earners with higher minimum wages will hurt both small businesses, and the job market overall. This claim has been widely debunked: a May 2016 report by the National Employment Law Project found no correlation between minimum wage increases and employment levels. Furthermore, data from Statistics Canada shows that the number of people working for minimum wage for employers with over 500 employees in Ontario has increased from 36% in 1998, to a staggering 48.9% in 2016.

This increase tells us that problems associated with minimum wage are not fading into the background, but are in fact becoming more prevalent as larger portions of Ontario’s population struggle to live on minimum wage. Additionally, the impacts of a low minimum wage stretch far beyond the health of the economy. Sheila Block highlights these less obvious pressures in a recent article, citing a 2013 Poverty and Employment Precarity in Southern Ontario (PEPSO) study that indicates a strong correlation between job precarity (uncertainty around employment and low wages) and general health and quality of life. An ongoing LPRC study on precarious employment in London, set for release next month, shows similar findings. These indicators show us that un-liveable minimum wages strain our communities in deeper and more complex ways than the obvious money issues they contribute to. Leaving the minimum wage below a liveable standard does not cure the system itself, it simply postpones the implementation of legislation that could have real, immediate, positive impact on the people trying to make ends meet on low incomes.

In short, inaction in this case solves none of the root causes feeding the symptoms that plague our economy. Increasing minimum wage may not solve Ontario’s low income and underemployment problems overnight, but for thousands of families living in low income across the province, increasing minimum wage to a liveable standard is a solid first step.